How Has Binance Been More Successful Than Coinbase Within a Year?

Trading volume across the cryptocurrency market has remained on a downward path all this year. But that hasn’t affected the growth rate of Binance, currently the world’s leading cryptocurrency exchange by volume.

The Malta-based organization expects to earn circa $1 billion in profits despite the market slump in 2018. That is almost $650 million higher than the annual profit projections of Coinbase, around $456 million by the end of this year. While the market awaits a more precise picture as both the exchanges post their annual reports next year, the surplus profit gap between the projections of Binance and Coinbase has pushed the former towards the title of the most successful crypto exchange in 2018.

Volume Comparison

According to a crypto volume index available at Blockchain Transparency Institute (BTI), Binance leads the crypto exchange industry concerning 24-hour trade volume. As of November, the exchange has posted $1.02 billion worth of daily transactions on its platform. Coinbase, at the same time, recorded just $106 million worth of volume. Other global exchanges, including OKEx, Huobi, BitFinex, etc. have published more capacity than their US counterpart.

Coinbase nevertheless tops the list when it comes to active users. The company has a total of 421,909 live customers as of November 2018 while Binance holds the second spot with 312,801 users in total.

SOURCE: Blockchain Transparency Institute Official Website

However, the BTI report mentions wash trading as one of the main factors behind the surplus volumes of the top exchanges. That said, traders who sell and purchase assets simultaneously could have been creating misleading financial activity on crypto exchanges. Moreover, trades involved in paid listings also generate fake volumes. Coins with small market caps supply exchanges with a large number of tokens – of worth between 5 to 60 BTC. The exchanges then use these tokens to inflate their volumes artificially.

Fewer Tokens on Coinbase

Compared to Binance, Coinbase has lesser number of altcoins listed on its trading platform. The Bitcoin exchange has recently picked up momentum after adding new cryptos like Bitcoin Cash, Ether, Ethereum Classic and Litecoin. Binance, at the same time, lists a total of 158 cryptocurrencies with close to 400 trading pairs.

Nevertheless, regulations limit Coinbase more than they do Binance.

Coinbase works as a licensed money transmitter business in the US, allowing it to have regulated banking relationships with local banks. That means that the exchange can facilitate crypto-to-fiat trades to its customers. But, it is liable to list only those assets that are either decentralized or regulated by the Securities and Exchange Commission (SEC) under their securities law.

Binance does not have such compulsions. The exchange operates typically as a crypto-to-crypto trading platform and does not offer any fiat trading option. It allows them to circumvent many legalities that Coinbase must face on a day-to-day basis.

In the end, nevertheless, it is the profits that decide which one the winner is among all. Binance so far leads the rest, despite being a relatively newer and less-experienced exchange.